Allstate alleges 17 companies ran $2 million no-fault fraud scheme

David Miller ; 2025-11-19 06:36:30

Lawsuit alleges five physicians fronted for unlicensed operators across 90 clinics

Claims

By Tez Romero

Nov 21, 2025Share

Allstate has accused 17 shell companies of running a $2 million ultrasound fraud ring through New York's no-fault system.

A sprawling insurance fraud network allegedly used fake medical corporations and sham ultrasound clinics to submit fraudulent claims to Allstate, according to a lawsuit filed November 19 in federal court in New York's Eastern District.

The case alleges that unlicensed operators recruited five physicians to front what looked like legitimate medical practices while secretly running a coordinated scheme to submit bogus claims for diagnostic ultrasounds that patients rarely needed - or sometimes never received.

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Here's how it allegedly worked: The operation set up 17 separate companies that appeared independent but functioned as one machine. Eleven "technical" entities, owned by unlicensed individuals, would show up at no-fault clinics across the New York metro area and perform ultrasounds. Six "professional" corporations, with licensed doctors listed as owners, would bill separately for interpreting those same scans.

This dual-billing approach - known in the industry as a PC/TC split - let the network charge twice for every procedure. The technical side billed for performing the ultrasound, while the professional side billed for reading it. Allstate says the defendants submitted more than $2 million in claims through this arrangement.

The lawsuit paints a picture of an operation designed to look legitimate on paper while violating nearly every rule in New York's no-fault playbook. The professional corporations were supposedly owned by physicians, as state law requires, but Allstate alleges the real control stayed with unlicensed businesspeople who masterminded the scheme.

Those same physicians - board-certified in fields like gastroenterology and physical rehabilitation - were allegedly rubber-stamping ultrasound interpretations despite having no training in radiology. One doctor listed in the filing is a gastroenterologist who lives in Maryland and works at a practice in Pennsylvania, yet somehow was interpreting ultrasounds for New York accident victims.

Patients allegedly came through kickback deals with no-fault clinics scattered across 90 locations in the region. Many received spinal ultrasounds, a test Allstate says is rarely indicated for the soft-tissue injuries typical in car accidents and isn't part of standard treatment protocols.

The fraud allegedly relied on mailing claims to insurers, which triggered federal mail fraud charges and opened the door to RICO claims - the racketeering law typically reserved for organized crime. More than 1,000 fraudulent claims went through the mail, according to the filing.

Two of the physicians named had been sued before. GEICO sued one in 2024 for allegedly running a similar scheme, and another faced GEICO allegations in 2025 over nearly identical conduct.

Allstate is seeking to recover more than $982,000 in damages, which could triple under RICO's penalty provisions. The insurer also wants a court declaration that the defendants can't collect on any pending bills.

The allegations remain untested in court, and no final determination has been made. This is yet another headache for an industry already grappling with organized fraud rings bleeding millions from the system.